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In February 2017, the depicted short-term downtrend was initiated around the depicted supply zone (0.7310-0.7380).

However, a recent bullish breakout above the downtrend line took place on May 22. Since then, the market has been bullish as depicted on the chart.

The price zone of 0.7150-0.7230 (Key-Zone) stood as a temporary resistance zone until a bullish breakout was expressed above 0.7230.

This resulted in a quick bullish advance towards the next supply zone around 0.7310-0.7380 which was temporarily breached to the upside.

Recent bearish pullback was executed towards the price zone of 0.7310-0.7380 (newly-established demand-zone) which failed to offer enough bullish support for the NZD/USD pair.

Re-consolidation below the price level of 0.7300 enhances the bearish side of the market. This brings the NZD/USD pair again towards 0.7230-0.7150 (Key-Zone) where recent weak bullish recovery was manifested earlier in September.

An atypical Head and Shoulders pattern is being expressed on the depicted chart indicating high probability of bearish reversal.

The current price levels of 0.7320-0.7350 can be watched for a valid SELL entry if enough bearish rejection is expressed.

Breakdown of the neckline 0.7150 confirms the reversal pattern. Expected bearish targets are located around 0.7050, 0.6925 and eventually 0.6800.

EUR/USD: Unlike what its GBP/USD counterpart is doing, the EUR/USD pair is not an attractive market at the present. It would be OK to wait until price either goes above the resistance line at 1.2050; or when it goes below the support line at 1.1850 (which would require a strong buying or selling pressure).

USD/CHF: This pair has been experiencing some correction since yesterday – after a bullish signal has been generated. As long as price does not go below the support level at 0.9500, the bullish signal cannot be invalidated. It is possible for price to journey upwards from here.

GBP/USD: The GBP/USD pair has gained more than 460 pips this week, resulting in a huge Bullish Confirmation Pattern in the market. Price is currently above the accumulation territory at 1.3550, going towards the distribution territory at 1.3600. The distribution territory would be easily exceeded as price goes further upwards.

USD/JPY: Since this currency trading instrument jumped upward at the beginning of this week, this pair has been caught in a perpetual bullish movement. Price has gained over 320 pips, and it is currently above the demand level at 111.00, going towards the supply level at 111.50 (which might even be exceeded).

EUR/JPY: The EUR/JPY pair has gone upwards this week, enabling a bullish bias on the market. The EMA 11 is above the EMA 56 and the RSI period 14 is above the level 50. There is a huge Bullish Confirmation Pattern in the market and a further upwards movement is anticipated, which would make price break more and more supply levels.

In January 2015, the EUR/USD pair moved below the major demand levels near 1.2050-1.2100 (multiple previous bottoms set in July 2012 and June 2010). Hence, a long-term bearish target was projected toward 0.9450.

In March 2015, EUR/USD bears challenged the monthly demand level around 1.0500, which had been previously reached in August 1997.

In the longer term, the level of 0.9450 remains a projected target if any monthly candlestick achieves bearish closure below the depicted monthly demand level of 1.0500.

However, the EUR/USD pair has been trapped within the depicted consolidation range (1.0500-1.1450) until the current bullish breakout was executed above 1.1450.

The current bullish breakout above 1.1450 allows a quick bullish advance towards 1.2100 where price action should be watched for evident bearish rejection and a valid SELL Entry.

Daily Outlook

In January 2017, the previous downtrend reversed when the Head and Shoulders pattern was established around 1.0500. Since then, evident bullish momentum has been expressed on the chart.

The daily supply zone failed to pause the ongoing bullish momentum. Instead, evident bullish breakout is being witnessed on the chart. The next Supply level to meet the pair is located around 1.2100 (Level of previous multiple bottoms) where bearish rejection and a valid SELL entry can be anticipated.

On the other hand, If bearish pullback persists below 1.1800 and 1.1700, the price zone of 1.1415-1.1520 can be watched for a valid BUY entry

Recently, the GBP/USD pair has been trading upwards. The price tested the level of 1.3616. Anyway, according to the 5M time frame, I found that there is a hidden bearish divergence on the MACD oscilator, which is a sign that buyers became exhausted. My avice is to watch for potential selling opportunties today. The downward targets are set at the price of 1.3530, 1.3500 and 1.3475. Another warning for buyers at this stage is that ATR went to extreme.

Recently, Gold has been trading sideways at the price of $1,310.00. Anyway, according to the 30M time frame, I found that sellers are in contorl and that price is trading inside of the downward channel. I placed Fibonacci expansion to find potential downward targets. I got Fibonacci expansion 61.8% at the price of $1,310.00 and Fibonacci expansion 100% at the price of $1,294.00. Watch for potential selling opportunities.

The Bitcoin (BTC) has been trading downwards. As I expected, the price tested the level of $3,205 driven on the news Chinese bitcoin exchange ViaBTC has announced it will cease trading at the end of September – the second exchange in as many days to do so. According to an announcement, following the recent statement from the People's Bank of China and other authorities on exchange regulation and ICO risks, ViaBTC has decided to shutter its China-facing website. Techincal picture is still very bearish.

Trading recommendations:

According to the 1H time frame, I found broken support at $3,185, which is a sign that buying looks risky. There is a hidden bearish divergence on the movig average oscilator, which is another sign of weakness. My advice is to watch for potential selling opportuntiies. The first downward target is set at the price of $2,500.

Support/Resistance

$3.185 – Intraday resistance (price action)

$3.435 – Intraday resistance (price action)

$2.500 – Support (round number)

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Bitcoin bearish impulsive move is currently taking the price towards the support area of $2,617.60 - $2,867.30. The issues of banning the Bitcoin in China affected the growth of the cryptocurrency which led to severe bearish pressure engulfing most of the August bullish price action. As more governments and regulations are resisting the digital currency tagging it as unreliable, the demand for the Cryptocurrency is currently observing the worst counter move in the recent scenario. Currently the price is very impulsively bearish and proceeding towards the support area of $2,617.60 - $2,867.30. If the price bounces off the support area with a daily close, then we might see a bullish intervention again to take the price higher towards $3,917.20 - $4,000.00 resistance area. On the other hand, if the price breaks below the support area, the bearish move is expected to take the price much lower towards 1,850.00 support area. As the price is residing inside the Kumo Cloud and dynamic level of 20 EMA is also quite far away of the current price, some bullish intervention is expected to hit the Cryptocurrency in the coming days before it creates much lower lows.

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In the aftermath of yesterday's Bank of England interest rate decision, some MPC members remarks are hitting the newswires. In the response to comments by a member of the Bank of England Gertjan Vlieghe, which suggests that interest rate hikes may be necessary "within months", British Pound appreciates again across the board. In his view, a chance of upward pressure on UK inflation, continued fall in slack, rising wages pressure and household spending, together with robust global growth needed for a rate hike. His remarks are important because Vlieghe is considered the greatest dove among the monetary policy members in BoE. At the same time, he pointed out that there is still a risk that Brexit will have a greater impact on the economy than anticipated.

After the Bank of England September meeting, the narrative might be quickly shifting back to Brexit over the coming weeks. The ongoing GBP rally might only be a one-time boost for the currency as a primary goal of the Bank's hawkish signal as an attempt to realign market expectations with the idea of a gradual BoE tightening path, rather than preparing markets for an imminent rate rise.The heightened UK political uncertainty, which is a result of crucial Brexit-related events in the next few months, means that a November rate hike shouldn't be viewed as a sure thing.

Let's now take a look at the EUR/GBP technical picture at the daily time frame. The price has retraced 50% of the recent leg up and now is trading at the key technical support zone between the levels of 0.8791 - 0.8851. The golden trend line provides additional dynamic support, but in a case of a further decline, the next support is seen at the 61%Fibo at the level of 0.8692.

North Korea's night ballistic test passes without a great echo. There are at least three reasons behind this reaction. Firstly, a missile flying over Japan and falling into the Pacific is not interpreted as entering a conflict to a higher level (despite the hydrogen bomb owned by North Korea and the greatest reach achieved in today's test). Second: the intention of the tests was discovered by the Japanese agency Nikkei well in advance. Third: Investors now have a lot to digest - the central banks changing the rhetoric and picking up momentum.

Yesterday's inflation data from the US were better than expected as US consumer prices rose 0.4% in August compared with consensus forecasts of a 0.3% monthly gain. On a yearly basis, the CPI increased to 1.9% from 1.7% beating the expectations of a smaller increase of 1.8%. Underlying prices also rose 0.2% which was in line with consensus expectations. The year-on-year increase was unchanged at 1.7% compared with consensus forecasts of a slight decline to 1.6%. The perspective of higher inflationary pressures in the near future through the impact of hurricanes should favour more numbers of interest rate hikes by Fed by the end of the year (currently only one is being discounted by markets).

Let's now take a look at the US Dollar Index technical picture on the H4 time frame. The Dollar is still undervalued and sold out and the sentiment against the US currency is still definitely negative. Correction in sentiment before the next Fed meeting next week should be continued. Nevertheless, so far the golden trend line is still acting very well as a dynamic resistance as the market wasn't able to break out through the level of 92.54. The nearest support is seen at the level of 91.62.

After a long persistent bearish trend in place, USD/CHF is currently residing in a corrective range between 0.9440 to 0.9760 area. Recent positive economic reports from the US helped the bulls to push the price a bit higher but it could not hold the gain against CHF. Recently, The SNB Libor Rate annoncement was published unchanged as expected at -0.75% which helped the currency to gain some momentum yesterday. As the short-term interest rates are the paramount factor for the currency valuation, the same stance did contribute to the gains of CHF against USD in the current situation of the market. Today, US Core Retail Sales report is going to be published which is expected to be unchanged at 0.5%, Retail Sales report is expected to show a decrease to 0.1% from the previous value of 0.6%, Empire State Manufacturing Index is expected to decrease to 18.2 from the previous figure of 25.2, Capacity Utilization Rate is expected to have a slight increase to 76.8% from the previous value of 76.7%, Industrial Production report is expected to decrease to 0.1% from the previous value of 0.2%, and Prelim UoM Consumer Sentiment is expected to decrease to 95.1 from the previous figure of 96.8. As most of the forecasts are not quite positive for USD, any positive report can help USD to push the price higher. On the other hand, if the actual report confirms a forecast or worse than a forecast, then CHF is expected to dominate further in the coming days.

Now let us look at the technical chart. The price has shown a good amount of rejection of the bulls yesterday after the Swiss central bank announced the Libor Rate decision. Currently after the rejection, the price has come under bearish pressure in the market which is expected to reach 0.9440 support level in the coming days. As the price remains below the resistance level of 0.9770, the bearish bias is expected to continue further.

EUR/AUD is currently residing at the edge of 1.4880 support level in a corrective volatile trend structure. Both currencies in this pair have been quite strong amid positive economic reports recently, so the market sentiment is quite confused about providing proper directional push in the market by now. Recently, Australia's Employment Change report was published with a significant increase to 54.2k from the previous figure of 29.3k which was expected to decrease to 17.5k whereas Unemployment Rate was published with an unchanged value of 5.6% as expected. On the other hand, EUR has been also quite positive with the Employment change and other economic reports published recently which put the market in a more corrective structure. Today, the eurozone's Trade Balance report is going to be published which is expected to decrease to 20.1B from the previous figure of 22.3B. If the economic reports show worse figures today, then we might see AUD taking proper advantage of the reports to increase its gains over EUR. As today AUD did not have any economic reports but the worse report from the eurozone can easily put pressure on market sentiment which will be impulsively bearish in nature for the coming days.

Now let us look at the technical chart. The price is currently residing at the edge of 1.4880 support level which is also being held by the dynamic level of 20 EMA as resistance. As the price remains below the dynamic level of 20 EMA, the bearish pressure is expected to be constant in the market. If the price breaks below 1.4880 with a daily close today, then we might see further bearish pressure in the coming days with a target towards 1.4500.

NZD/USD has been quite volatile and corrective inside the range between the resistance area of 0.7370-0.7460 and support area of 0.6940-0.7050. Both countries have published upbeat economic reports this week which led to corrective structure in the market. The corrective structure is currently quite non-directional but bears are expected to get better momentum in light of recent positive high impact economic reports published on USD side. Today, Business NZ Manufacturing Index report was published with an increase to 57.9 from the previous figure of 55.5. The positive economic report did help the currency to gain some bullish momentum against USD which can be wiped out by the end of the day as high impact economic reports from the US are yet to be published. Today, US Core Retail Sales report is going to be published which is expected to be unchanged at 0.5%, Retail Sales report is expected to show a decrease to 0.1% from the previous value of 0.6%, Empire State Manufacturing Index is expected to decrease to 18.2 from the previous figure of 25.2, Capacity Utilization Rate is expected to have a slight increase to 76.8% from the previous value of 76.7%, Industrial Production report is expected to decrease to 0.1% from the previous value of 0.2%, and Prelim UoM Consumer Sentiment is expected to decrease to 95.1 from the previous figure of 96.8. The forecasts for the US economic reports today are quite mixed in nature that is expected to create a good amount of volatility in the market where any positive report publishing today will lead to USD gain against NZD in the coming days.

Now let us look at the technical chart. The price is currently being held by the dynamic level of 20 EMA inside the range between the resistance area of 0.7370-0.7460 and support area of 0.6940-0.7050. The price has been quite volatile and corrective in nature whereas the bullish rejections are quite larger than the bearish rejections along the way which signals that the bears are currently in a better position than bulls along the process. As the price remains below the dynamic level of 20 EMA, the bearish bias is expected to continue taking the price towards the support area of 0.6940-0.7050.

In the morning, the news reported a launch of a missile test from North Korea towards the direction of Japan. The medium-range missile reached over 700 kilometers and flew 3,700 kilometers, which is further than necessary to reach the US base on Guam (3,400 kilometers). President Trump once again stated that all options are considered, including the military one. The market reaction is rather calm (on Friday morning).

On Thursday, two important news reports on the economy came out: the Bank of England said that it would consider the option of pulling liquidity out of markets in the coming months - this is a reaction to the growth of inflation. The pound sharply turned up and reached the morning peak of Friday at 1.3450.

Inflation data in the US came out: The inflation index rose to +1.9% per annum - a signal to strengthen the dollar ahead of the Fed meeting next week on September 20.

We note a sharp decline in bitcoin to 3080 on Friday morning - bitcoin is waiting for a long correction period.

Recently, Bitcoin has been quite bearish in nature due to cancellation of the initial coin offering in China. There are also rumors that China is going to ban the Bitcoin exchanges permanently in the country. China has been causing problem with the Cryptocurrencies whereas Bitcoin is affected the most. Moreover, JP Morgan CEO has also tagged Bitcoin as unreliable and fraud in his speech in the investors conference recently which has also played a vital role in the drastic fall of the demand for Bitcoin. Apart from China, more countries are now questioning the reliability of the Cryptocurrency market and most of the regulators are against accepting to be a proper financial instrument. Currently the price has continued the bearish impulsive fall after retesting the $3,917.20 - $4,000.00 resistance area and residing inside the Kumo Cloud. As for the current impulsive selling, the price is expected to head towards $2,617.60 - $2,867.30 support area very soon. As the price remains below the resistance area, the bearish bias is expected to continue further.

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BTC China, one of the largest cryptanalysts in China, has just announced that it will officially close on September 30. The decision to close the stock exchange is mainly due to the recent regulations that also banned ICO projects. BTC China, however, ensures that outside the Chinese market, the stock exchange will continue to operate. The BTCC is not the first stock market affected by recent regulatory actions. Binance company has already stated that it will leave the Chinese market some time later.The market data indicate that the price of Bitcoin is constantly decreasing. Moreover, there are some rumors about the introduction by the Chinese authorities of a ban on the exchange of Bitcoins into the normal currency.

Let's now take a look at the Bitcoin technical picture on the H4 time frame. The wave C slide down has reached the 161%Fibo extensions at the level of $3,079 and 61%Fibo retracement at the level of $3.012. This is a good zone for a temporary bounce in order to develop the wave (iv) correction. When this correction is done, there is one more wave to the downside left for the whole down cycle to terminate and bounce up.

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Another North Korean rocket test for several hours dominated the financial markets. The ballistic test, in which the missile flew over the Japanese island of Hokkaido, does not escalate tensions in the eyes of investors as it does not bring the conflict to a new level. Such an assessment is confirmed by the stable exchange rate of Gold and the predominance of buyers on Asian stock exchanges. USD/JPY is also catching up quickly and is almost 100 pips higher at 109.50. GBP/USD goes above 1.3400, EUR/USD is at 1.1910

On Friday 15th of September, the event calendar is light in an important news release, so only during the US session, some data will be posted, like Retail Sales, Empire State Manufacturing Index, Industrial Production, Business Inventories, and Preliminary UoM Consumer Sentiment.

GBP/USD analysis for 15/09/2017:

Yesterday, the Bank of England decided to leave the interest rate unchanged at the level of 0.25%, together with Asset Purchase Facility at the level of 435Bln. There was a 7-2 vote for the decision which was also in line with consensus forecasts from a 6-2 vote at the previous meeting. McCafferty and Saunders again voted for an immediate increase in rates to 0.50%. In the official statement, BoE said, that it sees the potential for interest rates to increase within the next few months if the economy grows as expected and underlying price pressures rise. Moreover, all MPC members also judged that policy should be tightened faster than the market expects. The BoE inflation expectations were raised to over 3.0% in October. In conclusion, the overall rhetoric was way more hawkish than expected, so the expectations for a future interest rate hike has made the British Pound to rally across the board.

Let's now take a look at the GBP/USD technical picture on the H4 time frame. The price bounced from the lower line of the golden channel and rallied up towards the daily time frame technical resistance at the level of 1.3450. Currently, the zone between the levels of .13250 - 1.3270 will act as a technical support for bulls. It is worth to notice, that the market conditions are overbought and there is a visible bearish divergence between the price and the momentum indicator. The nearest support is seen at the level of 1.3327.

Market Snapshot: Gold approaching trend line

The price of Gold moved further away from the recent swing high at the level of $1,357 and currently is approaching the long-term navy trend line around the level of $1,311. Any breakout below the gray area between the levels of $1,298 -$1, 308 would confirm the top in Gold at the level of $1,357 and further decline towards the level of $1,280.

Market Snapshot: USD/CAD in horizontal correction

The price of USD/CAD has made another marginal lower low at the level of 1.2061 and since then the price is moving in a sideway channel between the levels of 1.2090 - .12230. This looks like a technical bearish flag pattern, which is a trend continuation sign. To change this bias, the bull camp would have to break out above the key technical resistance zone at the level of 1.2440.

USD/JPY is expected to trade with a bullish outlook.The pair broke above the bullish channel, which confirmed a positive outlook. The 20-period moving average crossed below the 50-period one. The relative strength index is heading upward.

Hence, as long as 110.25 holds on the upside, a further upside to 110.80 and even to 111.05 seems more likely to occur.

Alternatively, if the price moves in the opposite direction, a short position is recommended below 110.25 with a target at 109.85.

Chart Explanation: The black line shows the pivot point. The current price above the pivot point indicates a bullish position, while the price below the pivot point is a signal for a short position. The red lines show the support levels and the green line indicates the resistance level. These levels can be used to enter and exit trades.

The pair retreated from 0.9705 (the high of September 14) and broke below its 20-period and 50-period moving averages. The relative strength index is capped by a bearish trend line since September 14.

The reported acceleration in U.S. consumer prices, which helped to raise expectations of the Federal Reserve keeping its interest-rate-rise schedule this year, did not give the U.S. dollar a sustainable boost.

To sum up, as long as 0.9680 is not surpassed, look for a new test with targets at 0.9605 and 0.9580 in extension.

Chart Explanation: The black line shows the pivot point. The present price above the pivot point indicates a bullish position, and the price below the pivot points indicates a short position. The red lines show the support levels and the green line indicates the resistance levels. These levels can be used to enter and exit trades.

We will retain our yesterday's outlook of GBP/JPY. It is still expected to trade in a higher range. The pair is holding on the upside and is trading above its rising 20-period and 50-period moving averages, which play support roles. The relative strength index is above its neutrality level at 50.

To conclude, as long as 146.55 holds on the downside, look for a further rise to 48.50 and even to 149.10 in extension.

Alternatively, if the price moves in the direction opposite to the forecast, a short position is recommended below 146.55 with the target at 145.65.

Strategy: BUY, Stop Loss: 146.55, Take Profit: 148.50.

Chart Explanation: the black line shows the pivot point. The price above the pivot point indicates the bullish position; and when it is below the pivot points, it indicates a short position. The red lines show the support levels and the green line indicates the resistance levels. These levels can be used to enter and exit trades.

NZD/USD is expected to trade in a lower range as the pair is below its resistance level. Despite the recent bounce, the pair is still trading below the declining 50-period moving average. The upside potential should be limited by the key resistance at 0.7255. Even though a continuation of the technical rebound cannot be ruled out, its extent should be limited.

Therefore, below 0.7255, expect a further drop to 0.7210 and even to 0.7190 in extension.

The black line shows the pivot point. Currently, the price is above the pivot point, which indicates the bullish position. If it remains below the pivot point, it will indicate the short position. The red lines show the support levels and the green line indicates the resistance levels. These levels can be used to enter and exit trades.

The warning for Dollar bulls played through. Price got rejected at the 61.8% Fibonacci retracement, but Dollar bulls are now fighting back. Price respected the critical support and trend change level at 91.70 and did not break it.

Black line - support

The Dollar index is inside the 4-hour Kumo. Trend is neutral in the short-term. Price has not made a lower low. Price is still above support at 91.70. This favors bulls. Bears need to break below the cloud and below the black trend line.

On a daily basis, we have a rejection at the kijun-sen (yellow line indicator). Trend of course remains bearish. Bulls need to hold above the tenkan-sen (Red line indicator) while the bears will need to break below it, in order to confirm that the bounce is over and we should not expect a bigger one. Longer-term view remains bearish expecting a move below 90.The material has been provided by InstaForex Company - www.instaforex.com

Gold price has bounced towards our important short-term resistance and trend change level of $1,334. Price got rejected. This is not a good sign for bulls. Short-term trend is weak and justified a deeper pull back towards $1,310.

Black rectangle - resistance

Gold price is back inside the cloud. However the rejection at the resistance implies more downside ahead. As long as price is below $1,334 price is in danger of making new lows towards $1,310-$1,300. In case resistance is broken, we should start our next move to new highs.

On a daily basis, we have a reversal candle so far. It is too early to tell, but the rejection at the tenkan-sen (Red line indicator) implies more downside to be expected. Longer-term we remain bullish looking for a move above $1,400.The material has been provided by InstaForex Company - www.instaforex.com

The NZD/USD pair is still trading in the bullish trend from the support spot of 0.7187 - 0.7231. On the H4 chart, the price is in a bullish channel. This is confirmed by the RSI indicator signaling that it is still in a bullish trending market. As the price is still above the moving average (100), immediate support is seen at 0.7231, which coincides with a golden ratio (23.6% of Fibonacci). Hence, the first support is set at the level of 0.7231. So, the market is likely to show signs of a bullish trend around the area of 0.7187 - 0.7231. In other words, buy orders are recommended above the prices of 0.7187 - 0.7231 with the first target at the level of 0.7293 (pivot point). Furthermore, if the trend is able to breakout through the first resistance level of 0.7293. Moreover, the pair could climb towards the second resistance 0.7343). However, it would also be wise to consider where to place a stop loss; this should be set below the second support of 0.7131 (double bottom).

The USD/CHF pair didn't make any significant movements yesterday. There are no changes in our technical outlook. The USD/CHF pair broke resistance which turned to strong support at the level of 0.9580. The level of 0.9580 coincides with a golden ratio (61.8% of Fibonacci), which is expected to act as major support today. The Relative Strength Index (RSI) is considered overbought because it is above 30. The RSI is still signaling that the trend is upward as it is still strong above the moving average (100). This suggests the pair will probably go up in coming hours. Accordingly, the market is likely to show signs of a bullish trend. In other words, buy orders are recommended above the spot of 0.9624 with the first target at the level of 0.9679. From this point, the pair is likely to begin an ascending movement to the point of 0.9679 and further to the level of 0.9710. The level of 0.9710 will act as strong resistance and the double top is already set at the point of 0.9710. On the other hand, if a breakout takes place at the support level of 0.9580, then this scenario may become invalidated. Remember to place a stop loss; it should be set below the second support of 0.9550.

Ideally the minor support at 1.6327 will continue to protect the downside for a rally above 1.6570 confirming, that red wave v higher towards at least 1.6883 is developing. Longer term, we continue to look for much higher levels for this cross, but sometimes this cross move is slow-motion and is not really going anywhere.

R3: 1.6624

R2: 1.6569

R1: 1.6532

Pivot: 1.6485

S1: 1.6415

S2: 1.6332

S3: 1.6309

Trading recommendation:

We are long EUR from 1.6395 with stop placed at 1.6295. If you are not long EUR yet, then buy a break above 1.6569 and use the same stop at 1.6295.

When the European market opens, some economic data will be released such as Trade Balance. The US will release a batch of macroeconomic reports such as Prelim UoM Inflation Expectations, Business Inventories m/m, Prelim UoM Consumer Sentiment, Industrial Production m/m, Capacity Utilization Rate, Empire State Manufacturing Index, Retail Sales m/m, and Core Retail Sales m/m. So amid such a packed economic calendar, EUR/USD will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Breakout BUY Level: 1.1980.

Strong Resistance:1.1973.

Original Resistance: 1.1961.

Inner Sell Area: 1.1949.

Target Inner Area: 1.1921.

Inner Buy Area: 1.1893.

Original Support: 1.1881.

Strong Support: 1.1869.

Breakout SELL Level: 1.1862.

Disclaimer: Trading Forex (foreign exchange) on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

In Asia, today Japan will not release any economic data. However, the US will present a series of macroeconomic reports such as Prelim UoM Inflation Expectations, Business Inventories m/m, Prelim UoM Consumer Sentiment, Industrial Production m/m, Capacity Utilization Rate, Empire State Manufacturing Index, Retail Sales m/m, and Core Retail Sales m/m. So there is a probability the USD/JPY pair will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVELS:

Resistance 3: 110.75.

Resistance 2: 110.53.

Resistance 1: 110.31.

Support 1: 110.04.

Support 2: 109.83.

Support 3: 109.61.

Disclaimer: Trading Forex (foreign exchange) on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

We continue to look for more upside pressure towards 134.80 and 137.36 as long as minor support at 130.55 and more importantly as long as support at 129.35 is able to protect the downside. Short-term a break above minor resistance at 131.76 confirms renewed strength for the next rally higher towards 134.80.

R3: 132.67

R2: 132.00

R1: 131.76

Pivot: 131.00

S1: 130.55

S2: 130.05

S3: 129.35

Trading recommendation:

Our stop at 130.65 was hit for a small profit. We are looking to buy EUR again upon a break above 131.76 with stop placed at 130.50.

Price is reversing very nicely below major resistance at 131.96 (Fibonacci extension, Elliott wave theory) and we expect a strong reaction from this level to push price down to at least 130.71 support (Fibonacci retracement, Fibonacci extension, horizontal overlap support).

Stochastic (34,3,1) is once again approaching our 96% resistance where we expect a second reaction from.

Price is approaching major support at 87.91 (Fibonacci retracement, horizontal pullback support) and we expect a strong bounce from this level to push price up to at least 88.56 resistance (Fibonacci extension, horizontal swing high resistance).

RSI (34) still remains above our ascending support which is holding up our bullish momentum really nicely. Only a break of that ascending support line would trigger a bearish change in momentum.

Price is bouncing up perfectly from our major support at 0.7966 (Fibonacci extension, Fibonacci retracement, horizontal swing low support, bullish divergence) and we expect to see a further push up from this level to at least 0.8051 resistance (Fibonacci retracement, horizontal swing high resistance).

Stochastic (34,3,1) is seeing strong support above 8% where we expect a further bounce from. We can also see bullish divergence vs price signalling that a reversal is impending.

Price dropped and bounced up perfectly from our buying area to reach our profit target. We expect it to drop once again to our major support at 1.1829 (Fibonacci retracement, Fibonacci extension, horizontal overlap support) and we make a strong bounce from this level to push price up to at least 1.1926 resistance (Fibonacci retracement, horizontal pullback resistance) once again.

Stochastic (34,3,1) is seeing strong support above 4.1% where we expect a bounce from similar to the one we're expecting on price.

Price has risen to our selling area and reversed perfectly as expected. We remain bearish below resistance at 0.9675 (Fibonacci extension, Fibonacci retracement, horizontal swing high resistance) and we expect to see a strong reaction from this level to push price down to at least 0.9578 support (Fibonacci retracement, horizontal overlap support).

Price has risen to our selling area as expected. We remain bearish below major resistance at 110.90 (Fibonacci retracement, multiple horizontal swing high resistance) and we expect a strong reaction from this level to push price down to 108.52 support (Fibonacci retracement, horizontal overlap support).

Stochastic (34,3,1) is seeing major resistance below 97% and we expect a drop from this level soon, similar to the one we're expecting on price.

Traders continue to record profits on the euro, as they could not form a new idea for its growth following the ECB's reluctance to give the market guidance on the timing of the curtailment of the asset buy-back program.

Industrial production rose by 0.1% in the eurozone for the month of July. The result coincided with the forecast of experts. On an annualized basis, the growth was 3.2%, which is higher than 2.8% a month earlier.

The euro zone economy continues to grow at a moderate pace, and the ECB will focus on not hindering this growth. As ECB Vice-President Vitor Constancio said on Tuesday, the regulator will promote the growth of inflation in the euro area to the target of 2% by maintaining the current monetary policy.

The focus of attention shifted to the meetings of the Central Bank of Switzerland and England, which will take place today. In anticipation of new data, trades will go to the lateral range, since there are no objective reasons for a full-fledged turn.

United Kingdom

Before the meeting of the Bank of England, which was previously considered a checkpoint, there was an unexpectedly good macroeconomic statistics that added enthusiasm to the bulls, refuting all forecasts and assumptions.

Consumer inflation in August rose by 2.9% year-on-year after a 2.6% increase in the previous month, exceeding the forecast of 2.8%. Core inflation (CPI) rose to 2.7%, and this is the highest since 2011.

These data will have an impact on the position of the Bank of England, which just recently pointed out that inflation is not growing strongly against the backdrop of the collapse of the pound after Brexit. At the previous meeting, only two of the eight Cabinet members voted for an immediate rate hike. Despite this, the current level was already close to 3%, that is, the deviation from the target set by the Bank of England was 0.9%. Recall that if the deviation of inflation from the target is 1%, the head of the Bank of England, Mark Carney will be forced to write to the Minister of Finance to state his views on methods to return control over prices.

The growth of inflation forced the market to wait for the report on employment, which was published on Wednesday. Some of the indicators supported the pound. Unemployment fell to 4.3%, which is the lowest level for 42 years. The number of employees has increased at the fastest rate since 2015. However, the key indicator is the growth rate of the average wage. It did not show positive dynamics, completely leveling expectations from inflation.

Weak wage growth was a surprise for the market. The pound rolled back from the 12-month high that was reached in the evening. The probability of seeing the Bank of England's more aggressive stance fell noticeably. Given the growth of positive news from the US, we can expect that the pound has already formed a local peak and will return to the support level of 1.2750 for testing the lower boundary of the rising channel.

Oil and ruble

A number of positive news supported oil prices. The International Energy Agency published on Wednesday a report that reflects the decline in world oil reserves for the first time in 4 months, and the forecast for daily growth in consumption in 2017 increased from 1.5 million to 1.6 million barrels. The day before, a similar report from OPEC also showed a decline in production for the first time since April. The decrease was 79 thousand barrels per day, mainly at the expense of Libya, Venezuela, Gabon and Iraq.

The market is actively speculating about prolonging the OPEC + agreement. Nigeria will be ready to join the agreement in March 2018 while Kuwait's energy minister also expressed readiness to consider the issue of extending the agreement after March.

Oil is in an upward trend and, most likely, will attempt to test the annual maximum. The Russian ruble, despite the support of oil, is weakening for a week in a row in anticipation of the meeting of the Bank of Russia on Friday against the backdrop of profit taking. Experts expect the rate to decrease by 0.5%. If the forecasts are confirmed, the ruble will be able to return to the upward trend.

The index plummeted to around the 200 SMA on H1 chart and price action seems to be in favor of the bulls, despite overall weakness across the board. To the downside, we're expecting a support around 91.67, at which a breakout should expose the next target at the 90.30 level. However, a recovery cannot be discarded at this stage and it should be limited by the 93.09 level.

H1 chart's resistance levels: 93.09 / 94.04

H1 chart's support levels: 91.67 / 90.30

Trading recommendations for today: Based on the H1 chart, place sell (short) orders only if the USD Index breaks with a bearish candlestick; the support level is at 91.67, take profit is at 90.30 and stop loss is at 93.04.

Bulls in the GBP/USD pair were favored by a more hawkish than expected BoE's minutes, as they kept interest rates unchanged during Thursday's meeting. Currently, the pair is looking to extend gains towards the resistance zone of 1.3429, at which a breakout should expose the next target around the 1.3482 level.

H1 chart's resistance levels: 1.3430 / 1.3482

H1 chart's support levels: 1.3309 / 1.3209

Trading recommendations for today: Based on the H1 chart, buy (long) orders only if the GBP/USD pair breaks a bullish candlestick; the resistance level is at 1.3430, take profit is at 1.3482 and stop loss is at 1.3176.

Encouraged by hopes of stimulating the US economy under the influence of Donald Trump's stimulating programs, the "bears" of the EUR/USD pair went into a counter-attack. The consequences of hurricanes "Harvey" and "Irma" were not as terrible as initially expected. Besides, history shows that "Katrina" was stronger against the two, at a time when the Fed raised the federal funds rate in 2005. Natural disasters are temporary and in the end the result of the restoration work can benefit the GDP. Simultaneously, the idea of tax reform, which in late 2016 pushed up the USD index, has returned to the market.

Judging by the comments of the Republicans, the bill on changes in the taxation system will become public for a week by September 25. Up to this point, one can only guess at the basic provisions of the reform and how far it will spread in the American economy. The president only hinted that the rich should not expect special preferences, which contrasts with previous statements about the reduction of corporate tax and real estate tax. However, the fact that Trump changes his mind like a glove, throughout it should be expected.

The rise in US GDP growth rate entails a more rapid tightening of the monetary policy by the Fed, compared with what the markets are currently waiting for. While the regulator is concerned about inflation, it must be understood that conditions are constantly changing. If in the 1970s, its average level was 7.1%, in the 1980s - 5.6%, in 1990 - 3%, in the 2000s - 2.6%, but now it is below the 2% mark. The liability is globalization and new technologies that increase competition and force producers to cut prices. In correlation with this, raising the federal funds rate to 3-3.5% or higher, as it was before, is not necessary. The cycle of monetary restriction of the Fed can be completed much earlier, and the realization of this fact will attract new sellers of the US dollar to the market.

Dynamics of inflation and federal funds rates

Source: Trading Economics.

The outlook for the euro, on the contrary, appears optimistic. In fact, due to the lag in the economic cycle in the eurozone compared to the United States, the ECB is at the same pace as the Fed in 2014. The European Central Bank is ready to normalize monetary policy, and the current EUR/USD pair correction only increases the likelihood of it. In October, Mario Draghi will report on the curtailment of the quantitative easing program. This will be a new occasion to buy the euro.

It should be noted that during its last cycle of tightening monetary policy in 2005-2008, the regional currency strengthened against the US dollar by 30%, and if history repeats itself, the current +13% is just the beginning. In this regard, it makes sense for traders to stick to the previous strategy in the main currency pair - buying on payoffs.

Technically, the inability of bulls to move prices above the target by 161.8% on the AB = CD pattern indicates their weakness. The formation of the double vertex increases the correction risks in the direction of at least the lower boundary of the upstream trading channel.